The Hindu Business Line : Declining tariffs push up outgoing ILD traffic

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New Delhi Feb. 2 Steep reduction in ISD tariffs has resulted in Indians talking more to their friends and relatives abroad through telephone.

According to numbers compiled by the Telecom Regulatory Authority of India the total outgoing call traffic has increased from 473 million minutes in 1999-2000 to an estimated 2,242 million minutes in 2006-07.

The tariff during the period has come down from a high of Rs 24 to Rs 7 per minute.

The increase in outgoing traffic has been more evident over the last two years when operators recorded more than 109 per cent increase in ISD calls. In 2004-05 outgoing international long distance calls accounted for 1,661 million minutes.

The increase in traffic also means a windfall for Indian ILD operators such as Tata managed Videsh Sanchar Nigam Ltd, which earned revenues of Rs 728 crore in a single quarter ended September 2006.

Other operators like Reliance Communications and Bharti Airtel have also earned Rs 564 crore and Rs 421 crore respectively during the same period.

This also gives the Indian operators more leverage while negotiating with foreign carriers, as traditionally the ILD traffic has been tilted in favour of incoming calls.

While the incoming ISD calls still account for a larger share of the total international long distance business, the gap with outgoing traffic is narrowing gradually.

Outgoing international calls, which accounted for 21 per cent of the total ILD business in India in 1999-2000, now adds up to nearly 24 per cent of the total traffic in minutes.

Not surprisingly, there has been a lot of interest to take an ILD licence over the past 6 months with companies such as AT&T, BT and Verizon planning a foray into the Indian long distance segment.

The fact that these companies are going after the enterprise segment indicates that the proliferation of call centres and multinational companies in the country have also added to increasing outgoing ILD calls.

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